Coquin: Makes a significant decision amid US allegations, withdrawals continue

Coquin: Makes a significant decision amid US allegations, withdrawals continue

KuCoin CEO, Johnny Liu, announced that the exchange will distribute $10 million worth of Bitcoin and the exchange’s native token as gifts.

This announcement follows accusations against KuCoin for money laundering and terrorist financing by both the US Department of Justice and the Commodity Futures Trading Commission.

In the wake of these accusations, fear, uncertainty, and doubt (FUD) gripped many users, leading to significant withdrawals from the cryptocurrency exchange, totaling over $1.7 billion.

Data from ONchain revealed approximately $2 billion in withdrawal operations from the exchange, with a 15% decrease in assets held by the cryptocurrency platform within the past 24 hours.

On the other hand, Ki Young Ju, CEO of CryptoQuant, compared KuCoin’s situation to that of FTX after the former underwent legal scrutiny. Ju noted that KuCoin has sufficient reserves to handle withdrawal operations, especially in Bitcoin and Ethereum withdrawals.

Despite the substantial increase in withdrawal operations primarily driven by retail users, KuCoin’s reserves remain adequate. Furthermore, the cryptocurrency trading platform has only experienced a minor impact on its overall reserves.

According to Ju, KuCoin does not commingle customer funds with its own, a notable difference from FTX’s practices. Additionally, comparing KuCoin’s reserves to FTX’s, KuCoin’s reserves appeared stable, whereas FTX’s reserves were close to zero.

In light of these allegations, KuCoin and two of its founders faced charges from American prosecutors for failing to comply with US anti-money laundering rules on Tuesday. Since its establishment in September 2017, the cryptocurrency exchange “intentionally failed” to establish a program to prevent the platform’s use in unlawful activities, including terrorist financing, as claimed by federal prosecutors in Manhattan on Tuesday.

Simultaneously, the company also failed to implement appropriate customer identity verification controls or report suspicious transactions on the exchange, according to the US Attorney’s Office for the Southern District of New York.

US Attorney Damian Williams stated in a statement: “Regarding the failure to implement even basic anti-money laundering policies, the defendants allowed KuCoin to operate in financial markets and use it as a haven for unlawful money laundering.” He added that the exchange received over $5 billion and sent over $4 billion in suspicious and criminal funds.

Additionally, the Commodity Futures Trading Commission, which oversees derivatives markets, filed a case against the company on Tuesday as well.

The company stated in response to these allegations: “KuCoin operates well, and our users’ assets are entirely safe. We are aware of the relevant reports and are currently investigating the details through our lawyers.” The exchange also stated that it respects “the laws and regulations of various countries and strictly adheres to compliance standards.”

KuCoin is one of the largest instant cryptocurrency exchanges in the world, with a daily trading volume of over $2 billion.

Following these news, the cryptocurrency token associated with the digital currency exchange significantly declined after the allegations were revealed, but it has stabilized relatively in the past 24 hours, currently registering at $12.17, up approximately 0.4%, while witnessing a decrease of about 18.2% in the past 7 days.

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